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###### Consumer Financial Protection Bureau

          - 12 CFR Part 1003

# AGENCY:

Consumer Financial Protection Bureau.

# ACTION:

Final rule; official interpretation.

# SUMMARY:

                        The Consumer Financial Protection Bureau (CFPB) is amending official commentary interpreting requirements of the CFPB's Regulation C to reflect the asset-size exemption threshold for banks, savings associations, and credit unions based on                               ( print page 105430)                            the annual percentage change in the average of the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). Based on the 2.9 percent average increase in the CPI-W for the 12-month period ending November 2024, the exemption threshold is adjusted to $58 million from $56 million. Institutions with assets of $58 million or less as of December 31, 2024, are exempt from collecting data in 2025.                    

# DATES:

This rule is effective on January 1, 2025.

# FOR FURTHER INFORMATION CONTACT:

                        George Karithanom, Regulatory Implementation & Guidance Program Analyst, Office of Regulations, at (202) 435-7700 or at:                         *https://reginquiries.consumerfinance.gov.*                         If you require this document in an alternative electronic format, please contact                         *CFPB_Accessibility@cfpb.gov.*

# SUPPLEMENTARY INFORMATION:

The CFPB is amending Regulation C, which implements the Home Mortgage Disclosure Act of 1975 (HMDA) asset thresholds, to establish the asset-sized exemption threshold for depository financial institutions for 2025. The asset threshold will be $58 million for 2025.

## I. Background

                    HMDA requires most mortgage lenders located in metropolitan areas to collect data about their housing-related lending activity.[1]                                          Annually, lenders must report their data to the appropriate Federal agencies and make the data available to the public. The CFPB's Regulation C implements HMDA.[2] 

                    Prior to 1997, HMDA exempted certain depository institutions as defined in HMDA (                    *i.e.,*                     banks, savings associations, and credit unions) with assets totaling $10 million or less as of the preceding year-end. In 1996, HMDA was amended to expand the asset-size exemption for these depository institutions.[3]                                          The amendment increased the dollar amount of the asset-size exemption threshold by requiring a one-time adjustment of the $10 million figure based on the percentage by which the CPI-W for 1996 exceeded the CPI-W for 1975, and it provided for annual adjustments thereafter based on the annual percentage increase in the CPI-W, rounded to the nearest multiple of $1 million.                

The definition of “financial institution” in § 1003.2(g) provides that the CFPB will adjust the asset threshold based on the year-to-year change in the average of the CPI-W, not seasonally adjusted, for each 12-month period ending in November, rounded to the nearest $1 million. For 2024, the threshold was $56 million. During the 12-month period ending in November 2024, the average of the CPI-W increased by 2.9 percent. As a result, the exemption threshold is increased to $58 million for 2025. Thus, banks, savings associations, and credit unions with assets of $58 million or less as of December 31, 2024, are exempt from collecting data in 2025. An institution's exemption from collecting data in 2025 does not affect its responsibility to report data it was required to collect in 2024.

## II. Procedural Requirements

### A. Administrative Procedure Act

                    Under the Administrative Procedure Act (APA), notice and opportunity for public comment are not required if the CFPB finds that notice and opportunity for public comment are impracticable, unnecessary, or contrary to the public interest.[4]                                          Pursuant to this final rule, comment 2(g)-2 in Regulation C, supplement I, is amended to update the exemption threshold. The amendment in this final rule is technical and non-discretionary, and it merely applies the formula established by Regulation C for determining any adjustments to the exemption threshold. For these reasons, the CFPB has determined that publishing a notice of proposed rulemaking and providing opportunity for public comment are unnecessary. Therefore, the amendment is adopted in final form.                

                    Section 553(d) of the APA generally requires publication of a final rule not less than 30 days before its effective date, except in the case of (1) a substantive rule which grants or recognizes an exemption or relieves a restriction; (2) interpretive rules and statements of policy; or (3) as otherwise provided by the agency for good cause found and published with the rule.[5]                                          At a minimum, the CFPB has determined that the amendment falls under the third exception to section 553(d). The CFPB finds that there is good cause to make the amendment effective on January 1, 2025. The amendment in this final rule is technical and non-discretionary, and it applies the method previously established in the agency's regulations for determining adjustments to the threshold.                

### B. Regulatory Flexibility Act

                    The Regulatory Flexibility Act (RFA) does not apply to a rulemaking where a general notice of proposed rulemaking is not required.[6]                                          As noted previously, the CFPB has determined that it is unnecessary to publish a general notice of proposed rulemaking for this final rule. Accordingly, the RFA's requirement relating to an initial and final regulatory flexibility analysis does not apply.                

### C. Paperwork Reduction Act

                    In accordance with the Paperwork Reduction Act of 1995,[7]                                          the CFPB reviewed this final rule. The CFPB has determined that this rule does not create any new information collections or substantially revise any existing collections.                

### D. Congressional Review Act

                    Pursuant to the Congressional Review Act, the CFPB will submit a report containing this rule and other required information to the United States Senate, the United States House of Representatives, and the Comptroller General of the United States prior to the rule taking effect.[8]                                          The Office of Information and Regulatory Affairs (OIRA) has designated this rule as not a “major rule” as defined by 5 U.S.C. 804(2).                

## List of Subjects in 12 CFR Part 1003

Banks, banking, Credit unions, Mortgages, National banks, Reporting and recordkeeping requirements, Savings associations.

## Authority and Issuance

For the reasons set forth above, the CFPB amends Regulation C, 12 CFR part 1003, as set forth below:

# PART 1003—HOME MORTGAGE DISCLOSURE (REGULATION C)

1. The authority citation for part 1003 continues to read as follows: 

Authority:12 U.S.C. 2803, 2804, 2805, 5512, 5581.

2. Supplement I to part 1003 is amended by revising *2(g) Financial Institution*                         under the heading                         *Section 1003.2—Definitions*                         to read as follows:                    

## Supplement I to Part 1003—Official Interpretations

* * * * *

### Section 1003.2—Definitions

* * * * *
      ( print page 105431)    

### 2(g) Financial Institution

                        1.                         *Preceding calendar year and preceding December 31.*                         The definition of financial institution refers both to the preceding calendar year and the preceding December 31. These terms refer to the calendar year and the December 31 preceding the current calendar year. For example, in 2019, the preceding calendar year is 2018 and the preceding December 31 is December 31, 2018. Accordingly, in 2019, Financial Institution A satisfies the asset-size threshold described in § 1003.2(g)(1)(i) if its assets exceeded the threshold specified in comment 2(g)-2 on December 31, 2018. Likewise, in 2020, Financial Institution A does not meet the loan-volume test described in § 1003.2(g)(1)(v)(A) if it originated fewer than 25 closed-end mortgage loans during either 2018 or 2019.                    

                        2.                         *Adjustment of exemption threshold for banks, savings associations, and credit unions.*                         For data collection in 2025, the asset-size exemption threshold is $58 million. Banks, savings associations, and credit unions with assets at or below $58 million as of December 31, 2024, are exempt from collecting data for 2025.                    

*3. Merger or acquisition—coverage of surviving or newly formed institution.*                         After a merger or acquisition, the surviving or newly formed institution is a financial institution under § 1003.2(g) if it, considering the combined assets, location, and lending activity of the surviving or newly formed institution and the merged or acquired institutions or acquired branches, satisfies the criteria included in § 1003.2(g). For example, A and B merge. The surviving or newly formed institution meets the loan threshold described in § 1003.2(g)(1)(v)(B) if the surviving or newly formed institution, A, and B originated a combined total of at least 200 open-end lines of credit in each of the two preceding calendar years. Likewise, the surviving or newly formed institution meets the asset-size threshold in § 1003.2(g)(1)(i) if its assets and the combined assets of A and B on December 31 of the preceding calendar year exceeded the threshold described in § 1003.2(g)(1)(i). Comment 2(g)-4 discusses a financial institution's responsibilities during the calendar year of a merger.                    

*4. Merger or acquisition—coverage for calendar year of merger or acquisition.*                         The scenarios described below illustrate a financial institution's responsibilities for the calendar year of a merger or acquisition. For purposes of these illustrations, a “covered institution” means a financial institution, as defined in § 1003.2(g), that is not exempt from reporting under § 1003.3(a), and “an institution that is not covered” means either an institution that is not a financial institution, as defined in § 1003.2(g), or an institution that is exempt from reporting under § 1003.3(a).                    

i. Two institutions that are not covered merge. The surviving or newly formed institution meets all of the requirements necessary to be a covered institution. No data collection is required for the calendar year of the merger (even though the merger creates an institution that meets all of the requirements necessary to be a covered institution). When a branch office of an institution that is not covered is acquired by another institution that is not covered, and the acquisition results in a covered institution, no data collection is required for the calendar year of the acquisition.

ii. A covered institution and an institution that is not covered merge. The covered institution is the surviving institution, or a new covered institution is formed. For the calendar year of the merger, data collection is required for covered loans and applications handled in the offices of the merged institution that was previously covered and is optional for covered loans and applications handled in offices of the merged institution that was previously not covered. When a covered institution acquires a branch office of an institution that is not covered, data collection is optional for covered loans and applications handled by the acquired branch office for the calendar year of the acquisition.

iii. A covered institution and an institution that is not covered merge. The institution that is not covered is the surviving institution, or a new institution that is not covered is formed. For the calendar year of the merger, data collection is required for covered loans and applications handled in offices of the previously covered institution that took place prior to the merger. After the merger date, data collection is optional for covered loans and applications handled in the offices of the institution that was previously covered. When an institution remains not covered after acquiring a branch office of a covered institution, data collection is required for transactions of the acquired branch office that take place prior to the acquisition. Data collection by the acquired branch office is optional for transactions taking place in the remainder of the calendar year after the acquisition.

iv. Two covered institutions merge. The surviving or newly formed institution is a covered institution. Data collection is required for the entire calendar year of the merger. The surviving or newly formed institution files either a consolidated submission or separate submissions for that calendar year. When a covered institution acquires a branch office of a covered institution, data collection is required for the entire calendar year of the merger. Data for the acquired branch office may be submitted by either institution.

*5. Originations.*                         Whether an institution is a financial institution depends in part on whether the institution originated at least 25 closed-end mortgage loans in each of the two preceding calendar years or at least 200 open-end lines of credit in each of the two preceding calendar years. Comments 4(a)-2 through -4 discuss whether activities with respect to a particular closed-end mortgage loan or open-end line of credit constitute an origination for purposes of § 1003.2(g).                    

*6. Branches of foreign banks—treated as banks.*                         A Federal branch or a State-licensed or insured branch of a foreign bank that meets the definition of a “bank” under section 3(a)(1) of the Federal Deposit Insurance Act (12 U.S.C. 1813(a)) is a bank for the purposes of § 1003.2(g).                    

*7. Branches and offices of foreign banks and other entities—treated as nondepository financial institutions.*                         A Federal agency, State-licensed agency, State-licensed uninsured branch of a foreign bank, commercial lending company owned or controlled by a foreign bank, or entity operating under section 25 or 25A of the Federal Reserve Act, 12 U.S.C. 601 and 611 (Edge Act and agreement corporations) may not meet the definition of “bank” under the Federal Deposit Insurance Act and may thereby fail to satisfy the definition of a depository financial institution under § 1003.2(g)(1). An entity is nonetheless a financial institution if it meets the definition of nondepository financial institution under § 1003.2(g)(2).                    

* * * * *

Brian Shearer,

Assistant Director, Office of Policy Planning and Strategy, Consumer Financial Protection Bureau. 

# Footnotes

1.                             12 U.S.C. 2801-2810.                    
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2.                             12 CFR part 1003.                    
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3.                             12 U.S.C. 2808(b).                    
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4.                             5 U.S.C. 553(b)(B).                    
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5.                             5 U.S.C. 553(d).                    
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6.                             5 U.S.C. 603(a), 604(a).                    
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7.                             44 U.S.C. 3506; 5 CFR part 1320.                    
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8.                             5 U.S.C. 801*et seq.*
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[FR Doc. 2024-30652 Filed 12-26-24; 8:45 am]

BILLING CODE 4810-25-P